NRP Group Changes Development Pipeline For 2020
The economic disruption caused by the coronavirus pandemic has forced many developers to hit pause on projects in their pipeline for 2020. Financing, permits, construction materials and personnel are just some of the challenges to navigate.
In the case of Cleveland-based NRP Group, the company has reduced the number of multifamily properties it initially planned to build in 2020, but the percentage of those that are affordable and workforce housing has increased.
NRP Group now plans to break ground on 25 multifamily projects across the U.S. in 2020. Of those, 17 consist of affordable and workforce housing, while the remaining eight are market-rate apartment buildings.
“The projects we have chosen to move forward on in the workforce and market-rate space are those properties with the most compelling attributes related to location, proximity to transportation, job creation and other attributes of a dynamic market,” NRP Group Managing Director, Capital Markets George Currall told Bisnow.
NRP Group’s revised pipeline anticipates 3,000 new affordable and workforce housing units to break ground in 2020, with a projected overall unit count of 5,000 by the end of the year. That represents an increase of 15% to 20% in unit starts year-over-year, Currall said.
For comparison, the company announced plans in January to break ground on 28 multifamily projects in 2020. That asset mix originally included four workforce housing projects, 14 affordable housing projects and 10 market-rate projects, for a total of 6,559 units. If that pipeline had remained unchanged, the unit total would have represented a 50% year-over-year increase in starts.
“There is a long-standing shortage of affordable housing in the U.S., and the pandemic has added to this need. We are emphasizing affordable housing in 2020 in light of this, and nearly two-thirds of our pipeline for this year is now dedicated to developing affordable and workforce communities,” Currall said.
Over the past four weeks, the company has broken ground on over 900 affordable units in Texas, which were standard tax credit and bond deals. Those units also include workforce housing for moderate-income renters.
Those properties include The Arcadian, The Scott at Medio Creek and Luna Flats in San Antonio, as well as Independence at Collin McKinney in McKinney, Texas. The company has a similar number of affordable units in the development pipeline still planned to close and start construction in 2020.
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